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                           PHASE FORWARD INCORPORATED

             AMENDED AND RESTATED 2004 EMPLOYEE STOCK PURCHASE PLAN

ARTICLE 1 - PURPOSE.

      This 2004 Employee Stock Purchase Plan (the "Plan") is intended to
encourage stock ownership by all eligible employees of Phase Forward
Incorporated (the "Company"), a Delaware corporation, and its participating
subsidiaries (as defined in Article 17) so that they may share in the growth of
the Company by acquiring or increasing their proprietary interest in the
Company. The Plan is designed to encourage eligible employees to remain in the
employ of the Company and its participating subsidiaries. The Plan is intended
to constitute an "employee stock purchase plan" within the meaning of Section
423(b) of the Internal Revenue Code of 1986, as amended (the "Code"). Purchase
options are to be granted under the Plan only to employees of the Company or its
subsidiaries as provided in Article 3.

ARTICLE 2 - ADMINISTRATION OF THE PLAN.

      This Plan shall be administered by the Board or by a committee appointed
by the Board (the "Committee"). In the event the Board fails to appoint or
refrains from appointing a Committee, the Board shall have all power and
authority to administer this Plan. In such event, the word "Committee" wherever
used herein shall be deemed to mean the Board. The Committee shall, subject to
the provisions of the Plan, have the power to construe this Plan, to determine
all questions hereunder, and to adopt and amend such rules and regulations for
the administration of this Plan as it may deem desirable. No member of the Board
or the Committee shall be liable for any action or determination made in good
faith with respect to this Plan or any option granted under it.

ARTICLE 3 - ELIGIBLE EMPLOYEES.

      All employees of the Company or any of its participating subsidiaries
whose customary employment is more than 20 hours per week and for more than five
months in any calendar year and who have completed at least 90 days of
employment with us on or before the first day of any Payment Period (as defined
in Article 5) shall be eligible to receive purchase options under the Plan to
purchase common stock of the Company, and all eligible employees shall have the
same rights and privileges hereunder. Persons who are eligible employees on the
first business day of any Payment Period shall receive their purchase options as
of such day. Persons who become eligible employees after any date on which
purchase options are granted under the Plan shall be granted purchase options on
the first day of the next succeeding Payment Period on which purchase options
are granted to eligible employees under the Plan. In no event, however, may an
employee be granted a purchase option if such employee, immediately after the
purchase option was granted, would be treated as owning stock possessing five
percent or more of the total combined voting power or value of all classes of
stock of the Company or of any parent corporation or subsidiary corporation, as
the terms "parent corporation" and "subsidiary corporation" are defined in
Section 424(e) and (f) of the Code. For purposes of determining stock ownership
under this paragraph, the rules of Section 424(d) of the Code shall apply, and
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stock which the employee may purchase under outstanding purchase options shall
be treated as stock owned by the employee.

ARTICLE 4 - STOCK SUBJECT TO THE PLAN.

      The stock subject to the purchase options under the Plan shall be shares
of the Company's authorized but unissued common stock, par value $0.01 per share
(the "Common Stock"), or shares of Common Stock reacquired by the Company,
including shares purchased in the open market. The aggregate number of shares
which may be issued pursuant to the Plan is three hundred twenty thousand
(320,000), subject to adjustment as provided in Article 12. If any purchase
option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject thereto shall again be
available under the Plan.

ARTICLE 5 - PAYMENT PERIOD AND PURCHASE OPTIONS.

      The first Payment Period during which payroll deductions will be
accumulated under the Plan shall commence on such date as is determined by the
Board (or Committee) and shall end on November 30, 2004 (the "First Payment
Period"). For the remainder of the duration of the Plan, Payment Periods shall
consist of the six-month periods commencing on December 1 and June 1 and ending
on the last days of November and May of each calendar year.

      Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan a purchase option to purchase on the last day of such Payment Period, at
the Option Price hereinafter provided for, a maximum of 5,000 shares, on
condition that such employee remains eligible to participate in the Plan
throughout the remainder of such Payment Period. The participant shall be
entitled to exercise the purchase option so granted only to the extent of the
participant's accumulated payroll deductions on the last day of such Payment
Period. If the participant's accumulated payroll deductions on the last day of
the Payment Period would enable the participant to purchase more than 5,000
shares except for the 5,000-share limitation, the excess of the amount of the
accumulated payroll deductions over the aggregate purchase price of the 5,000
shares shall be promptly refunded to the participant by the Company, without
interest. The Option Price per share for each Payment Period shall be the lesser
of (i) 85% of the average market price of the Common Stock on the first business
day of the Payment Period and (ii) 85% of the average market price of the Common
Stock on the last business day of the Payment Period, in either event rounded up
to the nearest cent. The foregoing limitation on the number of shares subject to
purchase option and the Option Price shall be subject to adjustment as provided
in Article 12.

      For purposes of the Plan, the term "average market price" on any date
means (i) the average (on that date) of the high and low prices of the Common
Stock on the principal national securities exchange on which the Common Stock is
traded, if the Common Stock is then traded on a national securities exchange; or
(ii) the last reported sale price (on that date) of the Common Stock on the
NASDAQ National Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the average of the closing bid and asked prices
last quoted (on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is


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not reported on the NASDAQ National Market; or (iv) if the Common Stock is not
publicly traded, the fair market value of the Common Stock as determined by the
Committee after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm's length.

      For purposes of the Plan, the term "business day" means a day on which
there is trading on the NASDAQ National Market or the aforementioned national
securities exchange, whichever is applicable pursuant to the preceding
paragraph; and if neither is applicable, a day that is not a Saturday, Sunday or
legal holiday in the Commonwealth of Massachusetts.

      No employee shall be granted a purchase option which permits the
employee's right to purchase stock under the Plan, and under all other Section
423(b) employee stock purchase plans of the Company and any parent or subsidiary
corporations, to accrue at a rate which exceeds $25,000 of fair market value of
such stock (determined on the date or dates that purchase options on such stock
were granted) for each calendar year in which such purchase option is
outstanding at any time. The purpose of the limitation in the preceding sentence
is to comply with Section 423(b)(8) of the Code. If the participant's
accumulated payroll deductions on the last day of the Payment Period would
otherwise enable the participant to purchase Common Stock in excess of the
Section 423(b)(8) limitation described in this paragraph, the excess of the
amount of the accumulated payroll deductions over the aggregate purchase price
of the shares actually purchased shall be promptly refunded to the participant
by the Company, without interest.

ARTICLE 6 - EXERCISE OF PURCHASE OPTION.

      Each eligible employee who continues to be a participant in the Plan on
the last day of a Payment Period shall be deemed to have exercised his or her
purchase option on such date and shall be deemed to have purchased from the
Company such number of full shares of Common Stock reserved for the purpose of
the Plan as the participant's accumulated payroll deductions on such date will
pay for at the Option Price, subject to the 5,000-share limit of the purchase
option and the Section 423(b)(8) limitation described in Article 5. If the
individual is not a participant on the last day of a Payment Period, he or she
shall not be entitled to exercise his or her purchase option and the amount of
his or her aggregate payroll deductions for that period will be refunded without
interest. Only full shares of Common Stock may be purchased under the Plan.
Unused payroll deductions remaining in a participant's account at the end of a
Payment Period by reason of the inability to purchase a fractional share shall
be carried forward to the next Payment Period.


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ARTICLE 7 - AUTHORIZATION FOR ENTERING THE PLAN.

      An employee may elect to enter the Plan by filling out, signing and
delivering to the Company an authorization in a form specified by the Company:

            A. Stating the percentage to be deducted regularly from the
      employee's pay;

            B. Authorizing the purchase of stock for the employee in each
      Payment Period in accordance with the terms of the Plan; and

            C. Specifying the exact name or names in which stock purchased for
      the employee is to be issued as provided under Article 11 hereof.

Such authorization must be received by the Company before the first day of the
next succeeding Payment Period and shall take effect only if the employee is an
eligible employee on the first business day of such Payment Period, provided,
however, that with respect to the First Payment Period, a purchase option shall
be granted to each eligible employee and such authorization to participate in
the plan must be received no more than three weeks following the first day of
the First Payment Period.

      Unless a participant files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the participant has on file
under the Plan will continue from one Payment Period to succeeding Payment
Periods as long as the Plan remains in effect.

      The Company will accumulate and hold for each participant's account the
amounts deducted from his or her pay. No interest will be paid on these amounts.

ARTICLE 8 - MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS.

      An employee may authorize payroll deductions in an amount (expressed as a
whole percentage or fixed amount) not more than ten percent (10%) of the
employee's total compensation, including base pay or salary and any overtime,
bonuses or commissions.

ARTICLE 9 - CHANGE IN PAYROLL DEDUCTIONS.

      Deductions may not be increased or decreased during a Payment Period.
However, a participant may withdraw in full from the Plan in which event the
Company will refund the amount of the participant aggregate payroll deductions
for that period will be refunded without interest.

ARTICLE 10 - WITHDRAWAL FROM THE PLAN.

      A participant may withdraw from the Plan (in whole but not in part) at any
time prior to the last day of a Payment Period by delivering a withdrawal notice
to the Company in the form specified by the Company.


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      To re-enter the Plan, an employee who has previously withdrawn must file a
new authorization before the first day of the next Payment Period in which he or
she wishes to participate. The employee's re-entry into the Plan becomes
effective at the beginning of such Payment Period, provided that he or she is an
eligible employee on the first business day of the Payment Period.

ARTICLE 11 - ISSUANCE OF STOCK.

      Certificates for stock issued to participants shall be delivered as soon
as practicable after each Payment Period by the Company's transfer agent.
Certificates may be issued in paper or electronic form at the discretion of the
Company.

      Stock purchased under the Plan shall be issued only in the name of the
participant.

ARTICLE 12 - ADJUSTMENTS.

      Upon the happening of any of the following described events, a
participant's rights under purchase options granted under the Plan shall be
adjusted as hereinafter provided:

            A. In the event that the shares of Common Stock shall be subdivided
      or combined into a greater or smaller number of shares or if, upon a
      reorganization, split-up, liquidation, recapitalization or the like of the
      Company, the shares of Common Stock shall be exchanged for other
      securities of the Company, each participant shall be entitled, subject to
      the conditions herein stated, to purchase such number of shares of Common
      Stock or amount of other securities of the Company as were exchangeable
      for the number of shares of Common Stock that such participant would have
      been entitled to purchase except for such action, and appropriate
      adjustments shall be made in the purchase price per share to reflect such
      subdivision, combination or exchange; and

            B. In the event the Company shall issue any of its shares as a stock
      dividend upon or with respect to the shares of stock of the class which
      shall at the time be subject to a purchase option hereunder, each
      participant upon exercising such a purchase option shall be entitled to
      receive (for the purchase price paid upon such exercise) the shares as to
      which the participant is exercising his or her purchase option and, in
      addition thereto (at no additional cost), such number of shares of the
      class or classes in which such stock dividend or dividends were declared
      or paid, and such amount of cash in lieu of fractional shares, as is equal
      to the number of shares thereof and the amount of cash in lieu of
      fractional shares, respectively, which the participant would have received
      if the participant had been the holder of the shares as to which the
      participant is exercising his or her purchase option at all times between
      the date of the granting of such purchase option and the date of its
      exercise.

      Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to purchase
options which have been or may be granted under the Plan and the limitations set
forth in the second paragraph of Article 5 shall


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also be appropriately adjusted to reflect the events specified in paragraphs A
and B above. Notwithstanding the foregoing, any adjustments made pursuant to
paragraphs A or B shall be made only after the Committee, based on advice of
counsel for the Company, determines whether such adjustments would constitute a
"modification" (as that term is defined in Section 424 of the Code). If the
Committee determines that such adjustments would constitute a modification, it
may refrain from making such adjustments.

      If the Company is to be consolidated with or acquired by another entity in
a merger, a sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), the Committee or the board of directors of any
entity assuming the obligations of the Company hereunder (the "Successor Board")
shall, with respect to purchase options then outstanding under the Plan, either
(i) make appropriate provision for the continuation of such purchase options by
arranging for the substitution on an equitable basis for the shares then subject
to such purchase options either (a) the consideration payable with respect to
the outstanding shares of the Common Stock in connection with the Acquisition,
(b) shares of stock of the successor corporation, or a parent or subsidiary of
such corporation, or (c) such other securities as the Successor Board deems
appropriate, the fair market value of which shall not materially exceed the fair
market value of the shares of Common Stock subject to such purchase options
immediately preceding the Acquisition; or (ii) terminate each participant's
purchase options in exchange for a cash payment equal to the excess of (a) the
fair market value on the date of the Acquisition, of the number of shares of
Common Stock that the participant's accumulated payroll deductions as of the
date of the Acquisition could purchase, at a purchase option price determined
with reference only to the first business day of the applicable Payment Period
and subject to the 5,000-share, Code Section 423(b)(8) and fractional-share
limitations on the amount of stock a participant would be entitled to purchase,
over (b) the result of multiplying such number of shares by such purchase option
price.

      The Committee or Successor Board shall determine the adjustments to be
made under this Article 12, and its determination shall be conclusive.

ARTICLE 13 - NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS.

      A purchase option granted under the Plan may not be transferred or
assigned, except by will or the laws of descent and distribution, and may be
exercised, during the participant's lifetime, only by the participant.

ARTICLE 14 - TERMINATION OF EMPLOYEE'S RIGHTS.

      Whenever a participant ceases to be an eligible employee because of
retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan shall
immediately terminate, and the Company shall promptly refund, without interest,
the entire balance of his or her payroll deduction account under the Plan.
Notwithstanding the foregoing, eligible employment shall be treated as
continuing intact while a participant is on military leave, sick leave or other
bona fide leave of absence, for up to 90 days, or for so long as the
participant's right to re-employment is guaranteed either by statute or by
contract, if longer than 90 days.


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ARTICLE 15 - TERMINATION AND AMENDMENTS TO PLAN.

      Unless terminated sooner as provided below, the Plan shall terminate on
May 31, 2014. The Plan may be terminated at any time by the Company's Board of
Directors but such termination shall not affect purchase options then
outstanding under the Plan. It will terminate in any case when all or
substantially all of the unissued shares of stock reserved for the purposes of
the Plan have been purchased. If at any time shares of stock reserved for the
purpose of the Plan remain available for purchase but not in sufficient number
to satisfy all then unfilled purchase requirements, the available shares shall
be apportioned among participants in proportion to the amount of payroll
deductions accumulated on behalf of each participant that would otherwise be
used to purchase stock, and the Plan shall terminate. Upon such termination or
any other termination of the Plan, all payroll deductions not used to purchase
stock will be refunded, without interest.

      The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the stockholders
of the Company, no amendment may (i) increase the number of shares that may be
issued under the Plan; (ii) change the class of employees eligible to receive
purchase options under the Plan, if such action would be treated as the adoption
of a new plan for purposes of Section 423(b) of the Code; or (iii) cause Rule
16b-3 under the Securities Exchange Act of 1934 to become inapplicable to the
Plan.

ARTICLE 16 - LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN.

      The Plan is intended to provide shares of Common Stock for investment and
not for resale. The Company does not, however, intend to restrict or influence
any employee in the conduct of his or her own affairs. An employee may,
therefore, sell stock purchased under the Plan at any time the employee chooses,
subject to compliance with the Company's insider trading policy, as amended and
in effect from time to time, any applicable federal or state securities laws and
subject to any restrictions imposed under Article 22 to ensure that tax
withholding obligations are satisfied. THE EMPLOYEE ASSUMES THE RISK OF ANY
MARKET FLUCTUATIONS IN THE PRICE OF THE STOCK.

ARTICLE 17 - PARTICIPATING SUBSIDIARIES.

      The term "participating subsidiary" shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424(f) of the
Code, which is designated from time to time by the Board of Directors to
participate in the Plan. The Board of Directors shall have the power to make
such designation before or after the Plan is approved by the stockholders.


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ARTICLE 18 - OPTIONEES NOT STOCKHOLDERS.

      Neither the granting of a purchase option to an employee nor the
deductions from his or her pay shall constitute such employee a stockholder of
the shares covered by a purchase option until such shares have been actually
purchased by the employee.

ARTICLE 19 - NO RIGHT TO EMPLOYMENT OR OTHER STATUS.

      Participation in the Plan shall not be construed as giving a participant
the right to continued employment or any other relationship with the Company.

ARTICLE 20 - APPLICATION OF FUNDS.

      The proceeds received by the Company from the sale of Common Stock
pursuant to purchase options granted under the Plan will be used for general
corporate purposes.

ARTICLE 21 - NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

      By electing to participate in the Plan, each participant agrees to notify
the Company in writing immediately after the participant transfers Common Stock
acquired under the Plan, if such transfer occurs within two years after the
first business day of the Payment Period in which such Common Stock was
acquired. Each participant further agrees to provide any information about such
a transfer as may be requested by the Company or any subsidiary corporation in
order to assist it in complying with the tax laws. Such dispositions generally
are treated as "disqualifying dispositions" under Sections 421 and 424 of the
Code, which have certain tax consequences to participants and to the Company and
its participating subsidiaries.

ARTICLE 22 - WITHHOLDING OF ADDITIONAL INCOME TAXES.

      By electing to participate in the Plan, each participant acknowledges that
the Company and its participating subsidiaries are required to withhold taxes
with respect to the amounts deducted from the participant's compensation and
accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant's compensation, when amounts are
added to the participant's account, used to purchase Common Stock or refunded,
in order to satisfy such withholding obligations. Each participant further
acknowledges that when Common Stock is purchased under the Plan the Company and
its participating subsidiaries may be required to withhold taxes with respect to
all or a portion of the difference between the fair market value of the Common
Stock purchased and its purchase price, and each participant agrees that such
taxes may be withheld from compensation otherwise payable to such participant.
It is intended that tax withholding will be accomplished in such a manner that
the full amount of payroll deductions elected by the participant under Article 7
will be used to purchase Common Stock. However, if amounts sufficient to satisfy
applicable tax withholding obligations have not been withheld from compensation
otherwise payable to any participant, then, notwithstanding any other provision
of the Plan, the Company may withhold such taxes from the participant's
accumulated payroll


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deductions and apply the net amount to the purchase of Common Stock, unless the
participant pays to the Company, prior to the exercise date, an amount
sufficient to satisfy such withholding obligations. Each participant further
acknowledges that the Company and its participating subsidiaries may be required
to withhold taxes in connection with the disposition of stock acquired under the
Plan and agrees that the Company or any participating subsidiary may take
whatever action it considers appropriate to satisfy such withholding
requirements, including deducting from compensation otherwise payable to such
participant an amount sufficient to satisfy such withholding requirements or
conditioning any disposition of Common Stock by the participant upon the payment
to the Company or such subsidiary of an amount sufficient to satisfy such
withholding requirements.

ARTICLE 23 - GOVERNMENTAL REGULATIONS.

      The Company's obligation to sell and deliver shares of Common Stock under
the Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.

      Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
identify shares of Common Stock issued under the Plan on its stock ownership
records and send tax information statements to employees and former employees
who transfer title to such shares.

ARTICLE 24 - GOVERNING LAW.

      The validity and construction of the Plan shall be governed by the laws of
Delaware, without giving effect to the principles of conflicts of law thereof.

ARTICLE 25 - APPROVAL OF BOARD OF DIRECTORS AND STOCKHOLDERS OF THE COMPANY.

      The Plan was adopted by the Board of Directors on March 11, 2004 and was
approved by the stockholders of the Company on April 20, 2004. The Plan was
Amended and Restated by the Board of Directors, without the need for
stockholder approval, on August 2, 2004.


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